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Ms. Maria is a certified chartered accountant and just appointed as financial controller at MADM Sdn Bhd, an established manufacturer of sealing machines for industrial

Ms. Maria is a certified chartered accountant and just appointed as financial controller at MADM Sdn Bhd, an established manufacturer of sealing machines for industrial purposes. Ms. Maria is being responsible to prepare and monitor the budget and expenses of the company business. Currently the company is preparing the annual budget for the year ending 31 December 2019 and Ms. Maria has been asked by Mr. Vincent, the chief accountant of the company, to prepare set of budgets on one of its products named SM-A1. This analysis will be presented to the top management for approval. MADM's production manager, Mr. Ahmad has provided information on the direct materials, labour and machine hours required to produce SM-A1. According to Mr. Ahmad, in order to produce one unit of product SM-A1, two types of materials are required namely material A and B. One unit of SM-A1 would need 5 kgs of material A at cost RM4 per kg. As for material B, 3 kgs are needed at cost RM7 per kg. On top of direct materials, there are two production lines involve in producing SM-A1, which are coating and assembly. For each unit of SM-A1, the machine hours for coating required 3 hours at RM7 per machine hour; for assembly, 3 direct labour hours is needed at RM9 per labour hour. The production manager also provides the information on expected opening stocks for finished goods and materials as on 1 April 2019. The finished goods are expected to have 100 units, material A and material B with 1,700 kgs and 1,000 kgs respectively. The company's inventory holding policy of finished goods define that the predicted sales of the following month will determine the required finished goods inventory of a month. Management decided to set it at 40% of predicted sales. In the case of direct materials, the required ending inventory balance was expected to be increased by 20% in April. Mr. Chong, the Head of Sales and Marketing department together with Madam Gayathri, the cost accountant were conducted a product analysis on SM-A1 to determine the selling pricing and sales forecast. Product SM-A1 has a selling price of RM215 per unit.

The sales forecast for product SM-A1 is provided as follows: (April 2019 -250 to be sold) (May 2019 350 to be sold) (June 2019 500 to be sold) (July 2019 550 to be sold)

Required: i. Based on the information given, you are required to prepare the following budget for the second quarter from April to June using Excel worksheet** for: a. Sales Budget for each month of the second quarter; b. Production Budget; c. Direct Material Usage Budget; d. Direct Material Purchases Budget; e. Direct Labour Budget. ii. Based on the calculation in part (1), write report using Words document on each budget to support the company's decision to allocate funds and monitoring of actual performance against budgeted on the project.

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